The current financial challenges facing the Diocese16 May 2019 By John Preston
Diocesan Secretary, John Preston, outlines the current financial challenge facing the Diocesan Board of Finance.
In 2018 the Diocese made a deficit of over £1 million for the first time. This arises because we spent more on parish ministry, support for ministry and mission and our administration than we received as income.
Here I will explain:
- That our income as parishes and as a diocese has been flat whilst our costs rise, and that this is projected to continue. We’re in this together.
- That although we have reserves, a large proportion of them legally cannot be spent.
- What we’re doing to tackle the issue.
- Three ways that parishes can help.
What’s behind this?
The simple answer is that we struggle to beat inflation, as parishes and as a diocese.
Charting the income of parishes and the diocese shows markedly similar patterns - over the past ten years the unrestricted income of parishes (left chart) and the diocese (right chart) has been broadly flat (the blue line); whilst inflation has meant that the real value of this has decreased (the dotted red line).It is certainly not the case that diocesan income has been increasing while parishes struggle – we are all in this together.
There are some clear, yet profound, challenges that are behind this:
- At parish level, statistics show that on average we’re losing around 2% of our givers each year, yet those who remain are increasing their giving by around 2%, thus causing income to be flat.
- With regard to parish share, parishes were able to increase their contribution last year by 1.1%, which represents a clear commitment from many parishes; yet because this is lower than the amount requested, the percentage contributed dropped and the level of our deficit increased.
But haven’t we got loads of money in reserves?
Yes….. and no!!
Parishes have over £24 million in reserves, although a proportion of this is restricted. It’s unevenly distributed – some parishes have considerable reserves, others have very few.
The Diocese does have £42 million of ‘Endowments’ – but this money cannot legally be spent. All we can do is receive an income from this. Last year we received a contribution of £900,000 towards clergy stipends which meant that we were able to ask for less in Parish Share. Our accounts also show £18.8 million of housing assets – the vast majority of which is the provision of homes for our clergy. Our unrestricted reserves, the money we can spend, dropped by £1.2 million to £4.8 million last year. It’s running out.
How are we tackling this?
We will need to reduce our spending, and seek to increase our income. The Bishop’s Council has tasked two groups to develop proposals to make significant reductions in spending, (one with regard to central costs at the diocesan office, the other with regard to ministry costs in the wider diocese) whilst ensuring that as far as possible we are able to maintain our focus on mission.
We’re also proposing to Synod that we establish a group to review the Share System. This will not solve all of our issues, but it is clear that the system needs some degree of change.
How can we help as a parish?
What is clear is that this is an issue that is facing us as parishes and as the diocese. We’re facing declining numbers and a corresponding decline in finance. Here are three things that we can do:
- Ensure that we are focused on mission and bringing new people into Church. This is not primarily to attract more givers, but first and foremost so they can come to know the love of God.
- Encourage generosity. In particular, consider joining the Parish Giving Scheme.
- Be as generous as you can with your Parish Share contribution. Some parishes have seen a reduction in the amount of Share asked this year, whilst other parishes have seen a very high increase. If some of those who have seen a reduction are able to contribute for a year or two at the previously requested level this would ease the pain for those seeing very large increases.
Just as you will be expressing your gratitude to those who give to support the work of your parish, so the wider diocese is grateful for all that is contributed in parish share, as well as to all those who minister faithfully in whatever capacity, lay or ordained. These are challenging times, and the challenges are set to continue, but by working together, supporting and challenging each other to new ways of working, we can overcome the significant challenges that lie ahead.
John Preston, Diocesan Secretary
 Legally, the Diocesan Board of Finance.